I nvestors don't always have to choose between growth and income.Paychex (PAYX )
offers both. The Rochester, N.Y.-based provider of payroll and human resources products and services has delivered steady top- and bottom-line growth in recent years. Earnings rose 5% to 7% in the past four fiscal years, while sales grew by 4% to 8%. Paychex has a three-year Earnings Stability Factor of 1 on a scale of 0 (calm) to 99 (wild).
Paychex's earnings for fiscal 2015, ending in May, are slated to rise 8% to $1.85 a share. A 9% increase to $2.01 a share is expected in fiscal 2016. Both estimates were recently revised higherIn late March, the company reported a fiscal third-quarter profit of 46 cents a share, up 5% from a year earlier. Revenue climbed 8% to $704.3 million. Sales from human resource services jumped 19% to $269.8 million. The company is also benefiting from the Affordable Care Act, also known as ObamaCare.
Paychex pays out the bulk of its net income to shareholders as dividends. It paid $510.6 million in dividends for fiscal 2014 or 81% of net income. The company has paid a quarterly cash dividend since 1988.
It last boosted its quarterly dividend in July, raising it to 38 cents a share from 35 cents. The firm typically pays in February, May, August and November.
Paychex pays $1.52 a share on an annual basis, giving it a yield of about 3.1%. It has the second largest yield among the dividend-paying stocks in the Commercial Services-Outsourcing group.Crawford (CRDA), a thinly traded, low-priced issue, offers the highest yield at around 3.9%.
In the past few weeks, Paychex has been tangling with its 10-week moving average as it forms a potential flat base. It had already staged a breakout from a flat base in late January. Although the stock had some ups and downs, it rose 7% past a 48.30 buy point before consolidating gains.
Source: http://www.nasdaq.com/article/leading-stock-paychex-offers-investors-growth-income-cm470510#ixzz3YjPQGqtq
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